Quiet Giant

Derwood Dunbar is retiring after a career of bridge-building and helping people be better than they were before

Derwood Dunbar, who is retiring in March as president and CEO of MAGNET, changed the face of group purchasing. Quietly but surely.
“He has been a stabilizing voice in the [group purchasing] industry,” notes Tom MacVaugh, assistant vice president support services, Lourdes Hospital Binghamton, N.Y.

“He’s the kind of guy who would say he’d like to be remembered for … bringing people together to make decisions and help others,” adds Jim Burns, vice president of group purchasing, Hospital Central Services Cooperative, Allentown, Pa.

Dunbar entered the group purchasing industry in 1980, when he was asked to create a program for the Hospital Council of Central Pennsylvania in Camp Hill, Pa. Seven years later, he was instrumental in the founding of MAGNET, a regional coalition of GPOs involved primarily in capital equipment contracting.

Then in 1990, he was a co-founder and first president of the Health Industry Group Purchasing Association.

In between, he managed to get a master’s degree in healthcare administration from the Wharton School of the University of Pennsylvania; attend Advanced Management Programs at Wharton and Cornell University; and earn Fellowships in the American College of Healthcare Executives, the Professional Society of Healthcare Group Purchasing, and the Association of Healthcare Resource & Materials Management.

“I always tell him he’s intellectually gifted,” jokes Burns. “He is vastly knowledgeable about the healthcare field,” he adds on a more serious note.
After Dunbar’s departure, current MAGNET chair Chris Moore, president of Joint Purchasing Corp., New York, will assume the duties of president.

Sheridan View Pharmacy
Dunbar’s healthcare education dates back to his days as a kid in the Rogers Park area of Chicago, where his father, Derwood Sr., owned a pharmacy a block or two from Lake Michigan, called Sheridan View Pharmacy. His mother, Helen, had a pharmacy degree as well, though she spent her working days as a schoolteacher.

“My first real job was working for my father, back when compounding was common,” recalls Dunbar. “He’d mix up the ingredients for a salve, and I’d end up putting it in a jar. Or he’d mix the compounds for a capsule, and I’d stand there putting together a hundred capsules.”

While still a teen, he got a summer job at St. Francis Hospital in Evanston, just north of Rogers Park. In his second summer there, he went to work for someone who would have a significant impact on his future – Ed Blaszczyk, director of purchasing. “I learned a lot about the purchasing business from Ed,” says Dunbar. A true logistician, Blaszczyk “was ahead of the general line of thought at the time.”

Dunbar began a premed program at Northwestern University. But after two years, he changed his mind, going back to work for Blaszczyk and enrolling at North Park University on Chicago’s Northwest Side. At one point, Blaszczyk said to him, “You’ve seen this side of the business, why not the other side?” recalls Dunbar. So he went to work for Mills Hospital Supply (now Medline Industries), one of the country’s largest distributors. He spent a year and a half there, working a variety of jobs, including order entry, customer service and warehouse.

Hospital career
But he was drawn to hospitals, and began a new phase in his career, working in various materials roles in several Chicago-area hospitals: Community Memorial General Hospital; Lutheran General and Deaconess Hospital; and, for 10 years, Columbus-Cuneo-Cabrini Medical Center, a three-hospital system in the city. Working on the provider side, Dunbar not only experienced the complexities of running a materials department encompassing multiple facilities, but also the difficulty of providing care in the inner city. While on the administrative staff of Columbus-Cuneo-Cabrini, “We would keep telling the sisters [of the Mission Sisters of the Sacred Heart of Jesus], ‘You need to get out of the city; you aren’t going to be able to make it here,’” he says. “They kept saying, ‘Our mission is caring for the indigent and the immigrant.’ We said ‘That’s fine, but it’s the old story – no money, no mission.’ They held on until they couldn’t any more. None of the hospitals exist today.”

In 1977, Dunbar, then the vice president of materials for Columbus-Cuneo-Cabrini, got a call from an executive from the Hospital Council of Central Pennsylvania, who was looking for someone to serve as vice president for shared services and operations. The offer intrigued Dunbar. “They wanted to start a group purchasing program along the same lines and level of respect as the Hospital Council of Western Pennsylvania,” whose group purchasing program was under the direction of Don Siegle, he recalls. So Dunbar, his wife, Alice, and their two sons, Jim and Brian (ages 13 and 11 at the time) moved to Camp Hill.

There had been prior attempts to create a purchasing program in the central part of the state, but the obstacles were formidable. “The geography is unusual,” says Dunbar, and the area was divided roughly into two distinct population centers. “It was like two separate circles that didn’t touch one another,” he says. Demonstrating the bridge-building skills of which Burns spoke, Dunbar created the program.

Just two years later, in 1979, he was involved in another bridge-building exercise – the creation of MAGNET, or the Mid-Atlantic Group Network of Shared Services. “A bunch of us got together at the Mid-Atlantic Health Congress and said, ‘You know, we can probably do some things better together than we can individually,’” recalls Dunbar. “Nobody had a good capital equipment portfolio, so we deferred to MAGNET to do that.” By bringing together a number of hospitals from multiple purchasing groups, many of whom had different fiscal years, MAGNET could offer equipment manufacturers an ongoing base of business, he explains.

In 1989, MAGNET asked Dunbar to run the organization on a “loan basis” from the Hospital Association of Pennsylvania. Two years later, he became the group’s full-time president. Today, MAGNET comprises five shareholder organizations, representing more than 600 acute-care hospitals, 760 long-term-care facilities, 7,250 physician practices and clinics, and more. The organizations are: Connecticut Hospital Association Shared Services Program; Joint Purchasing Corp.; Hospital Central Services Cooperative; Monmouth Ocean Healthcare Cooperative, Neptune, N.J.; and Southwest Ohio Health Care Affiliates, Dayton, Ohio. And although capital equipment is still its primary contract area, MAGNET also negotiates contracts for services and consumables.

The very next year (1990), Dunbar was intimately involved with the formation of another group purchasing organization, only this time, its purpose was not to write contracts, but rather, to represent the GPO industry’s interests on Capitol Hill and elsewhere. “The industry needed a singular voice,” says Dunbar. GPO executives had for years convened on an annual basis to share knowledge and skills in a forum called the Group Purchasing Group. While that was a valuable forum for learning, GPOs needed more. And so, working closely with MedEcon Services founder Bill Wooldridge, Dunbar launched the Health Industry Group Purchasing Association, or HIGPA. He was its first president, while Wooldridge was the first vice president.

“There were a couple of things we needed to take a stance on during the first 10 years, but nothing dramatic,” says Dunbar. That changed, of course, when the consumer press and later, the U.S. Senate, turned their attention to the GPO industry in 2002. “It’s an important voice,” says Dunbar today, speaking of HIGPA.

Quiet giant
“Derwood has received any number of rewards,” says Burns. “He’s very modest. He has served in our industry’s highest capacities, and he volunteers for almost anything where there’s a need. He is the kind of guy – and I think he would say this emphatically – who would like to be remembered for developing good will and cooperation among all the diverse players.” Dunbar has spent his life bringing people to the table for the purpose of improving healthcare and the supply chain, says Burns. “That’s the individual I have known for 25 years.”

In fact, Dunbar was one of the first people to call Burns when Burns entered healthcare group purchasing in 1980, after having served as director of procurement for a number of fast-food companies.

“He said, ‘We have an overlap in our hospital customers; why don’t we see if we can do some things together?’” recalls Burns. And so, Dunbar’s organization (Hospital Council of Central Pennsylvania) and that of Burns (Hospital Purchasing Service of Pennsylvania) began pooling their volume in select product areas, beginning with food, then medical/surgical products.

“He has mentored me,” says Burns, “and I try to do the same with the people I interface with. [Dunbar showed me] it’s not always about the bottom line; it’s about saving people’s lives and making a difference.”

Adds MacVaugh, “I have a huge respect for the man; he’s one of the true quiet giants of the industry.” MacVaugh first met Dunbar when MacVaugh was a territory sales rep for now-defunct Brotherston Hospital Supply in Philadelphia. “But I really got to know him when I went to Lancaster General Hospital [Lancaster, Pa.] a few years later, when I was one of his top two or three customers.” In the mid-1980s, MacVaugh went to work for Dunbar at the Hospital Council.

“He is this quiet diplomat who understands the business,” continues MacVaugh. “He is an industry historian, and he is universally respected for his knowledge of the business and his business ethics.”

MacVaugh recalls going to a Group Purchasing Group meeting several months after going to work for Dunbar in 1986. “I met the ‘who’s who’ of group purchasing,” he recalls. “Almost to the man or woman, they would say to me, ‘Hey Tom, you’re working for a super guy.’ This tiny, 35- or 38-hospital system [Hospital Council of Central Pennsylvania] was universally respected. Derwood was the diplomatic link, highly engaged in the hierarchy and leadership of group purchasing.

“He has that ability to build collaboration, build bridges, mitigate problems and moderate issues.” Though quiet, Dunbar is known and respected by virtually everyone in the group purchasing industry, continues MacVaugh. “And he has huge respect from the vendor community.

“He is a quality act; a good, ethical guy who wants to give value to the members he serves, and to the vendors.”

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